Correlation Between Aspen Insurance and Naked Wines
Can any of the company-specific risk be diversified away by investing in both Aspen Insurance and Naked Wines at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Aspen Insurance and Naked Wines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aspen Insurance Holdings and Naked Wines plc, you can compare the effects of market volatilities on Aspen Insurance and Naked Wines and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Aspen Insurance with a short position of Naked Wines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aspen Insurance and Naked Wines.
Diversification Opportunities for Aspen Insurance and Naked Wines
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aspen and Naked is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Aspen Insurance Holdings and Naked Wines plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naked Wines plc and Aspen Insurance is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Aspen Insurance Holdings are associated (or correlated) with Naked Wines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naked Wines plc has no effect on the direction of Aspen Insurance i.e., Aspen Insurance and Naked Wines go up and down completely randomly.
Pair Corralation between Aspen Insurance and Naked Wines
Assuming the 90 days trading horizon Aspen Insurance Holdings is expected to generate 1.08 times more return on investment than Naked Wines. However, Aspen Insurance is 1.08 times more volatile than Naked Wines plc. It trades about 0.2 of its potential returns per unit of risk. Naked Wines plc is currently generating about 0.21 per unit of risk. If you would invest 2,060 in Aspen Insurance Holdings on September 1, 2024 and sell it today you would earn a total of 148.00 from holding Aspen Insurance Holdings or generate 7.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Aspen Insurance Holdings vs. Naked Wines plc
Performance |
| Timeline |
| Aspen Insurance Holdings |
| Naked Wines plc |
Aspen Insurance and Naked Wines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aspen Insurance and Naked Wines
The main advantage of trading using opposite Aspen Insurance and Naked Wines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aspen Insurance position performs unexpectedly, Naked Wines can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Naked Wines will offset losses from the drop in Naked Wines' long position.| Aspen Insurance vs. Aspen Insurance Holdings | Aspen Insurance vs. Selective Insurance Group | Aspen Insurance vs. The Allstate | Aspen Insurance vs. AmTrust Financial Services |
| Naked Wines vs. Pernod Ricard SA | Naked Wines vs. Naked Wines plc | Naked Wines vs. Crimson Wine | Naked Wines vs. Brown Forman |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Global Correlations Find global opportunities by holding instruments from different markets |